In this article, we’ll explore Junior ISAs, explain what they are and how they work, and analyse the best options on the market. Junior ISAs offer a tax-efficient way to save for your child’s future. We’ll break down the different types and the conditions attached and guide you through the process of opening an account. Finally, we’ll compare the available top Cash and Stock and Shares junior ISAs.
What is a Junior ISA (JISA)?
A Junior ISA (Individual Savings Account) is a savings account set up by a parent or guardian on behalf of a child. It offers a tax-free way to save or invest for a child’s future, ensuring the money grows without being subject to income tax or capital gains tax.
Main Conditions
- Eligibility: The child must be under 18, live in the UK, and not have a Child Trust Fund.
- Contribution Limits: The maximum allowance you can contribute is £9,000 for the tax year 2024/25 (which ends on 5 April 2025).
- Access: The funds are locked away until the child turns 18, after which they can take control of the account.
Types of Junior ISAs
- Cash Junior ISA: Similar to the Cash ISA, it is comparable to a regular savings account, where you earn interest on the money you place. The interest rate can be fixed or variable, depending on the current interest rates.
- Stocks and Shares Junior ISA: Like the regular Stocks and Shares ISA, this allows you to invest in various assets, including shares, bonds, and funds. While the growth potential is higher, it also comes with a higher risk due to market volatility which means that you could lose (part of) the invested allowance.
How to Open a Junior ISA Account
Opening a Junior ISA account involves a few straightforward steps:
- Choose the Type of ISA: Decide between a Cash Junior ISA or a Stocks and Shares Junior ISA based on your risk appetite and savings goals.
- Research Providers: Compare different banks, building societies, and investment firms to find the best interest rates or investment options.
- Gather Documents: You will need proof of identity and address for both the child and the parent/guardian.
- Complete Application: Fill out the application form the chosen ISA provider provided.
- Fund the Account: Transfer money into the account, ensuring it does not exceed the annual contribution limit.
Best Junior Cash ISAs (Cash JISA)
Below, you will find our selection of the best Cash Junior ISAs available at the moment:
| Provider | AER | How to open it | Transfer allowed? |
| Tesco Bank | 4% | Online/Phone | Yes |
| NS&I | 4% | Online | Yes |
| Beverley Building Society | 5.5% | Branch, email, phone | Yes |
| Coventry BS | 4.95% | Post, Phone Branch | Yes |
| Skipton BS | 4.75% | Branch, Post | Yes (except Child Trust Funds) |
| Stafford BS | 4.75% | Branch, Post | Yes |
FAQ Junior ISAs
In most cases, it’s possible. However, not all providers allow this process.
Until the age of 16, the legal guardians or parents are in charge. From 16, the child can decide whether to make investments, but money is untouchable until the age of 18.
After 18, the junior ISA becomes available.
It depends on risk aversion. Cash ISA provides interest on cash placed into the account. It works similarly to a savings account. On the other hand, Stocks ISA allows you to invest in various products such as funds, ETFs, or stocks. This could grant a higher interest, but it could also be more risky, as there could be losses depending on the investments.
Yes. You can have different providers if the total allowance is less than £9,000 per tax year.